Best Small Business Loans and Grants for Minorities

Historically, minority business owners have found it difficult to secure funding from traditional financial institutions for reasons that range from legitimate, such as limited banking or credit history, to illegal in the form of discriminatory lending practices. Minority business owners may find more success when moving away from traditional banks and toward online lenders.

Financially Reviewed by Somer G. Anderson

At a glance — Greater success may be available for minority-owned businesses when they seek alternative funding sources, including online lenders and nonprofit organizations. In fact, a 2019 report from the Federal Reserve discovered that similar approval rates existed for white and black-owned business owners when they used online lenders. One such online lender providing services for minority business owners is OnDeck. OnDeck is our experts’ loan of choice. Read on to discover why.

Insights Into Small Business Loans for Minorities

Today, many small business owners don’t know where to turn for guidance and reliable information about loans and grants for minorities. Many minorities continue to feel marginalised and at a disadvantage when it comes to applying for a loan for their small business. That’s where our experts come in. They have compiled this comprehensive guide to give minority business owners all the information they need to make an informed decision about the best small business loans and grants for minorities.

The Best Small Business Loans for Minorities

The table below provides a summary of the top small business loans for minorities.


Best for

Minimum Credit Score

Minimum Time In Business

Min. Annual Revenue

Loan Amount

Interest Rate


Full Bluevine review

Invoice factoring




$5 million

0.25%-1.7% per week


Full Fundbox review

Credit line


3 months



10.1% to 79.8%


Full Kabbage review

Credit line


1 year



APRs between 24% and 99%


Full Ondeck review

Term loan


1 year



From 11.89% APR

SBA Loans

SBA Loans Review

depends on lender

depends on lender

depends on lender

depends on lender

depends on lender

depends on lender

Top Small Business Loans for Minorities - An In-Depth Look


BlueVine is an online lender that offers short-term loans and lines of credit of up to $250,000 with a one-year repayment term or invoice factoring up to $5 million for monthly invoices.

To qualify, you’ll need:

  • A 600 credit score
  • To show annual business revenue of at least $100,000
  • Online application
  • Less information to be provided
  • Fast application outcomes
  • Funds are more quickly available
  • Expensive funding
  • Limited financing options

While you get speedier application outcomes and quicker access to your SB funds, you’ll end up paying more with BlueVine than with a conventional lender.

We’ve also found that BlueVine often stops providing certain products when they need to concentrate on interventions like the Paycheck Protection Program (PPP), so check the product availability before applying. 


Fundbox offers business revolving lines of credit and one-time payment term loans, both with limits up to $150,000.

With a revolving line of credit, you can choose between a 12- or 24-week repayment program each time you draw. The term loans have a 24- or 52-week repayment plan with no origination fees or prepayment penalties applicable to them.

Fundbox qualifying requirements are that: 

  • You should be willing to provide some basic business details so their system can gain some insight into your business 
  • You should have a business bank account that reflects at least two months of activity in any supported accounting software, or at least three months of business transactions 
  • Your business should operate in one of the 50 states or one of the following supported US territories: Guam, Northern Mariana Islands, American Samoa, the US Virgin Islands, and Puerto Rico
  • Quick outcome turnaround times
  • Line of credit revolves, so constant access to cash
  • They look at your business, not you
  • Expensive financing

Fundbox, in our opinion, is a funding option worth considering.


Kabbage, has currently placed their lending products on hold, but you can join a waitlist and ask them to contact you once a certain product becomes available again. Kabbage usually offers flexible business lines of credit up to $250,000 with terms of 6, 12, or 18 months to repay.

Their funding eligibility requirements are:

  • Trading at least one year 
  • Revenues of $50,000 per year or $4,200 per month over the preceding three months
  • Must have a checking account
  • Should have a tax ID number
  • Conducting business in any of the 50 US states or US territories
  • A single monthly fee, which includes interest, admin, and origination
  • No minimum credit score
  • Don't consider business credit score
  • Quick funding
  • Consider owners that have declared bankruptcy once, at least one year from discharge
  • High cost of finance
  • Personal guarantee required
  • A hard pull on personal credit once finance offer accepted

With Kabbage, check funding availability before applying.


OnDeck offers revolving credit lines from $6,000 to $100,000 and business term loans of $5,000 up to $250,000. Credit lines have a 12-month repayment term, while you can repay term loans in up to 18 months.

To qualify, you must have:

  • Been in business for at least 12 months
  • A business bank account
  • A credit score of 600
  • Annual business revenue of $100,000
  • Easy application process
  • Quick access to funds
  • More straightforward qualification process than bank or SBA loans
  • Products meet a wide range of funding needs
  • Funding can be costly
  • More frequent repayments required (daily or weekly)
  • A lien is placed on business assets, and a personal guarantee is required

OnDeck is considered an excellent option for minority business owners who need capital for a variety of business needs.

SBA 7(a) Loan Program

SBA 7(a) loansmade by qualified lendersare loans guaranteed by the U.S. Small Business Administration (SBA), a federal entity founded in 1953 to promote small business growth. This loan type can be used to provide up to $5 million in capital funding. 

Maximum repayment terms span from 10 to 25 years, and interest rates charged on 7(a) loans are some of the lowest available. 

To qualify, you must:

  • Be officially registered as a for-profit business
  • Have fewer than 500 employees
  • Show less than $7.5 million revenue on average per year for the last three years
  • Have a net business income of under $5 million (after taxes and excluding carry-over losses)
  • Have an actual net worth of less than $15 million
  • One-third of SBA loans go to minority-owned businesses
  • Less costly financing
  • Government backing
  • Longer approval times
  • Slower access to funds

Time allowing, we consider this a good option for minority SB owners. They’ll be able to apply more of their profits toward business growth rather than debt repayment due to lower interest rates.

SBA Community Advantage Loans

The Community Advantage (CA) Loan Program—also run by the SBA—is structured to meet the needs of SBs operating in underserved markets. This program encourages CA lenders such as nonprofit organizations to make up to $250,000 in loans to minorities, veterans, women, and other underserved business owners.

The SBA guarantees up to 85% of an approved loan amount, which helps SB owners who don’t qualify for traditional financing. 

You will need to:

  • Demonstrate creditworthiness
  • Show your ability to repay the loan
  • Lack of collateral or assets won't disqualify you
  • Minorities (and other underserved) get preference
  • Cheap financing
  • Longer approval process
  • Loan amounts available less than typical SB loans

To apply, contact your local SBA district office.

SBA 8(a) Business Development Program

The 8(a) Business Development Program is an assistance program for small businesses with a disadvantaged owner(s). Essentially not a loan, but a certification program, 8(a) offers a wide range of assistance to firms owned and controlled by socially and economically disadvantaged individuals.

To level the playing field for SBs, the government limits competition for some of its contracts to those businesses that form part of the 8(a) Business Development Program. 

To qualify:

  • Your business must be at least 51% owned by a person from a socially and economically disadvantaged background
  • The owner's average gross income and personal net worth for the preceding three years must be $250,000 or less
  • The owner's assets must be $4 million or less.
  • Under federal law, minorities are considered socially disadvantaged
  • You can apply for certification online
  • None to speak of

Our opinion is that the 8(a) program assists many ambitious entrepreneurs to gain a niche in government contracting.

Business Grants Vs. Loans for Minorities: What's the Difference

The main difference between loans and grants is that the former is repayable while the latter isn't. Although this is the leading distinction between the two options, minority small business owners should be aware of other differences.

Only small businbesses operating in certain locations and industries may qualify for specific grants. Potential lenders focus on the business's financial health and its ability to repay the loan.

From requesting bank statements, business plans, and other documents, SB owners may find that loan applications require much more information than grants. Grantors, though, tend to take more time to approve applications and disburse funds than lenders do.

Finally, private lenders and financial institutions offer loans, whereas government agencies and establishments typically provide grants.  

Small Business Grants for Minorities

As a minority small business owner, there are several other ways to obtain funding that doesn’t necessarily have to be repaid. The following are some examples of minority business grants:

1. Grants.gov

Grants.gov doesn’t only offer grants to minority-owned businesses. Yet grants.gov is an excellent way to discover grants that apply to your niche industry and specific eligibility. Overall this federal run agency provides application information, guidelines about eligibility, and target dates for more than 1,000 small business grants. 

All federal government agencies providing minority business grants will advertise their information on grants.gov. Minority-owned businesses may wish to narrow down their loan search by looking for categories such as “small business”or more specific categories such as “nonprofits” or “Native American tribal organizations”.

2. The National Association for the Self-Employed (NASE) Growth Grants Program

NASE provides the Growth Grants Program which lets members apply for grants to assist with the growth of their business. These micro-grants can be worth as much as $4,000 a year. You need a NASE membership to be eligible. NASE doesn’t only offer small business grants, yet their program is tailored to small businesses who can’t necessarily find different financing methods. 

NASE provides these grants on a monthly basis and they review applications quarterly.

3. Small Business Innovation Research (SBIR) and Small Business Technology Transfer (SBTT)

If you have narrowed down your specification to minority business and development grants, you probably want to begin with the SBIR or SBIT programs. These government programs offer business funding opportunities for small businesses who are involved in innovative development and research. 

To be eligible you must have an American-owned and independently operated, for-profit small business. The main researcher must be employed by your business. Also, your business must have up to 500 employees. 

4. Rural Business Development Grants

If you run your business in a rural area, you should look at the Rural Business Development Grant Program run by USDA. You can apply for minority small business grants, in this program, for between $10,000 and $500,000.

This program is available to businesses who operate in rural regions that have a population of under 50,000 people. Furthermore, grant money needs to go towards projects that will help your town or rural area. 

5. USDA Water & Waste Disposal Loan & Grant Program

The USDA Water and Waste Disposal Loan and Grant Program assists business owners (minority business owners and more) who can’t get access to traditional business financing options. This program offers both business loans and grants. 

To be eligible for this grant program, your business must be related to water or waste disposal in a rural area or town with a population of under 10,000 people. 

The Bottom Line

This guide has covered the top small business loans and SBA loans. We have also discussed our loan of choice for minority business owners - OnDeck. You now have the information you need when applying for a minority business grant and black minority business grants.

Please also refer to the Minority Business Development Agency for any further information you as a minority small business owner may require. Just click here.